Rec Room social gaming platform to shut down on 1 June

Rec Room, the popular social gaming platform often compared to Roblox, has announced it will permanently shut down on 1 June 2026.

Despite amassing more than 150 million players and once reaching a valuation of $3.5 billion, the company confirmed in a blog post on Monday that it has failed to become a "sustainably profitable business."

The leadership team explained that operational costs consistently exceeded the revenue generated by the platform's user-created experiences.

This difficult decision follows a challenging period for the firm, which previously laid off half of its workforce in August 2025 in an unsuccessful attempt to secure its long-term financial future.

The company noted that a significant shift in the virtual reality market, combined with broader economic pressures within the gaming industry, made the path to profitability increasingly unattainable.

Rec Room CEO and co-founder Nick Fajt previously stated that earlier staffing cuts were intended to provide "years, not months of funding," yet the current climate has forced a total cessation of services.

Rec Room is not alone in its struggles; industry peers such as Meta’s Horizon Worlds have recently pivoted away from dedicated VR experiences, while Epic Games recently reduced its headcount by over 1,000 employees due to a downturn in engagement and excessive spending.

"Our costs always ended up overwhelming the revenue we brought in," the company stated, marking the end of a significant era for user-generated content in the VR space.

Following the closure, the developers plan to focus on preserving the community's creative legacy through offline archives.